The economy as a whole works because there are workers in every field who give their services to create products and services. That is why it is crucial to protect their rights and well-being during their employment. The Workmen Compensation Policy is an insurance policy based on the Workmen Compensation Act 1923 (WC Act) that ensures employee safety and security.
Understanding the labour insurance policy benefits is crucial for every employee to know their rights in the event of an unfortunate occurrence and to receive the right compensation and support on time.
What is the Workmen Compensation Act?
The Workmen Compensation Act 1923 is legislation that provides financial compensation to employees in the event of an accidental injury while performing their duties.
The labour insurance policy, under the WC Act, covers all types of employees, including full-time, part-time, temporary and casual employees. The act provides coverage for the following types of workplace injuries:
- Bodily injuries occurred while performing duty
- Temporary disablement
- Permanent disablement (complete or partial)
- Death due to workplace injury
- Disease or illness caused due to workplace conditions
- Legal and other expenses incurred by employees in any of the above cases
How Does the Workmen Compensation Act Protect Employees?
Provides Extensive Coverage
The Act requires organisations to provide financial coverage to all employees, whether they are full-time or part-time employees. The law comes into effect when an employee sustains injury, disablement or dies while performing their duties.
It is worth noting that the law also covers front-line workers in various industries, such as mining and manufacturing, across multiple roles, including truck drivers, factory workers and office staff.
Workplace Injury Compensation
The Workmen Compensation Act also mentions the statutory liabilities of employers to compensate employees for any workplace injuries they sustain while performing their duties.
The employer is liable to pay the compensation irrespective of who caused the accident at the workplace. The compensation is provided for bodily injuries, permanent total disability, permanent partial disability or temporary disability.
Death Compensation
The Act has a separate compensation policy for workplace injuries or disablement that may result in the employee’s death. In such cases, the compensation is provided to the direct nominee or beneficiary of the deceased employee. The financial support provided aims to allow the family and dependents of deceased employees to live their lives with dignity.
Provides Access to Justice
There is a large working sector in India that earns its livelihood by doing manual work, which sometimes leads to injuries or death. In such cases, the Workmen Compensation act provides unprecedented coverage protection for the affected employees and their families.
The act not only provides financial support but also grants access to legal recourse in cases of delayed compensation, refusal of compensation, or an unfair compensation amount.
Workmen Compensation Act: Compensation Amount
When an employee suffers from a workplace injury, they are entitled to get compensation under the act. The compensation amount varies depending on the type of injury.
Temporary Disabilities
In case an employee suffers from temporary disablement due to workplace injury, they will get 25% of their monthly wages as compensation under the act.
Permanent Partial Disability
For permanent partial disability, employees receive a corpus amount equal to a certain percentage of their lost earnings due to the injury. The exact details of the compensation amount under such injuries can be found in Part II, Schedule I of the Act.
Permanent Total Disability
In the unfortunate event of permanent disability to an employee, the act provides compensation of 60% of the employee’s monthly wages or ₹120000, whichever is higher.
Death
In case an employee dies, unfortunately, due to workplace injuries, then their dependent receives 50% of the deceased’s monthly wages or ₹120000, whichever is higher.
When Are Employers Not Liable to Pay Workmen Compensation?
There are certain conditions under the act when employers are not liable to pay any compensation to employees; these circumstances are:
- Injuries that result in partial or total disablement for less than three days
- An employee who suffers from injury or disability due to the negligence of safety norms
- Workplace injury occurring under the influence of alcohol or drugs
Workmen Compensation Insurance Role
Usually, it is the workers’ compensation policy that manages the financial aspect of providing compensation on the employer’s behalf. The policy covers the employer’s liabilities, such as:
- The cost of medical treatment for the injured employee.
- Provides compensation to the employee or their dependents; with a trusted insurer like TATA AIG, employers can expect a swift and streamlined compensation process without any delays.
- Coverage of legal fees incurred in the settlement of any compensation disputes
Summing Up
The Workmen Compensation Act is all about protecting employees’ right to compensation and safety due to workplace injuries. That is why the act makes it compulsory for employers to provide a Workmen’s Compensation Policy to their employees, which provides them with financial assistance in the event of an emergency.
Santosh Kumar is an editor at unfoldstuffs.com and a professional content writer. With years of experience he is passionate for creating engaging, informative and impactful topics.
